AXALTA COATING SYSTEMS LTD (NYSE:AXTA) – A Potentially Undervalued Stock Worth a Closer Look

AXALTA COATING SYSTEMS LTD (NYSE:AXTA) was identified by our Decent Value stock screener as a candidate with attractive valuation metrics while maintaining solid fundamentals. The company, a leading manufacturer of coatings systems, shows strong profitability, reasonable financial health, and steady growth—all at a price that suggests it may be undervalued.

Valuation

AXTA’s valuation metrics stand out:

• P/E Ratio of 12.89 – Below both the industry average (25.81) and the S&P 500 (26.55).
• Forward P/E of 10.69 – Suggests earnings growth is not yet fully priced in.
• Enterprise Value/EBITDA – More favorable than 67% of industry peers.
• Price/Free Cash Flow – Cheaper than 77.65% of competitors.

These figures indicate that AXTA trades at a discount relative to its earnings potential.

Profitability

The company excels in profitability, with key strengths including:

• Return on Equity (ROE) of 21.63% – Outperforming 90.59% of industry peers.
• Operating Margin of 15.73% – Better than 78.82% of competitors.
• Consistent Earnings Growth – EPS grew 37.43% over the past year.

Financial Health

While AXTA carries some debt, its financial position remains manageable:

• Current Ratio of 2.12 – Indicates strong short-term liquidity.
• Altman-Z Score of 2.40 – Suggests limited near-term bankruptcy risk.
• Debt Reduction Efforts – Improved debt-to-assets ratio compared to last year.

Growth Prospects

AXTA’s growth is steady, with expectations of:

• 10.63% Annual EPS Growth – Outpacing many industrial peers.
• Revenue Stability – Modest but consistent growth in recent years.

For a deeper dive into AXTA’s fundamentals, review the full report here.

Our Decent Value screener lists more stocks with similar characteristics and is updated regularly.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.